Gold Ends A Tad Lower Even As Dollar Weakens
Chicago (Nov 26) Gold futures ended a tad lower on Wednesday, despite a weak dollar trended after some largely soft economic data from the U.S. with initial claims for unemployment benefits rising more than expected even as new homes sales in October increased modestly.
In some soft economic news from the U.S., first-time claims for unemployment benefits unexpectedly increased in the week ended November 22, while a Thomson Reuters and the University of Michigan report showed consumer sentiment to have improved less than previously estimated in November.
A report from MNI Indicators on Wednesday showed Chicago-area business activity to have risen at a notably slower rate in November, partly due to a significant slowdown in the pace of growth in new orders. Meanwhile, pending home sales in the U.S. unexpectedly dropped in October but remained at a healthy level, a National Association of Realtors report showed Wednesday.
Separately, a Commerce Department report showed personal income in the U.S. rose less than expected in October, with the increase in personal spending also falling short of expectations.
On a positive note, durable goods orders unexpectedly rebounded in October after reporting an unexpected drop in new orders for U.S. manufactured durable goods in the previous month. However, core capital-goods orders dropped 1.3 percent for a second straight month.
Gold for February delivery, the most actively traded contract, edged down $0.30 to settle at $1,197.05 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.
Gold for February delivery scaled an intraday high of $1,201.60 and a low of $1,1194.60 an ounce.
On Tuesday, gold futures ended slightly higher at $1,197.10 an ounce, up $1.40 or almost 0.1 percent, due largely to a weak dollar.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 720.91 tons on Wednesday from its previous close of 723.01 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 87.63 on Wednesday, down from its previous close of 87.90 late Tuesday in North American trade. The dollar scaled a high of 88.04 intraday and a low of 87.52.
The euro trended higher against the dollar at $1.2511 on Wednesday, as compared to its previous close of $1.2475 late Tuesday in North American trade. The euro scaled a high of $1.2530 intraday and a low of $1.2444.
On the economic front, a report from the U.S. Labor Department on Wednesday showed initial jobless claims to have unexpectedly risen to 313,000 in the week ended November 22nd, up 21,000 from the previous week's revised level of 292,000.
Meanwhile, a report from the U.S. Commerce Department showed durable goods orders to have unexpectedly climbed by 0.4 percent in October following a revised 0.9 percent decline in the preceding month.
New home sales in the U.S. saw a modest increase in October, a Commerce Department report showed Wednesday. New home sales rose 0.7 percent to a seasonally adjusted annual rate of 458,000 in October from the revised September rate of 455,000. Economists expected new home sales to climb 0.6 percent to a rate of 470,000 from the 467,000 originally reported for the previous month.
Pending home sales in the U.S. unexpectedly decreased in October but remained at a healthy level, the National Association of Realtors said in a report on Wednesday. The pending home sales index tumbled 1.1 percent to 104.1 in October from an upwardly-revised 105.3 in September. Economists expected pending home sales to increase by about 0.6 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Consumer sentiment in the U.S. improved less than previously estimated in November, a report from Thomson Reuters and the University of Michigan showed Wednesday. The consumer sentiment index for November was downwardly revised to 88.8 from the mid-month reading of 89.4. Economists expected the index to be upwardly revised to 90.0.
Personal income in the U.S. rose less than expected in October, with the increase in personal spending also falling short of economist estimates, a report from the Commerce Department said Wednesday. The report said personal income edged up 0.2 percent in October, matching the increase seen in September. Economists expected income to increase by about 0.4 percent.
MNI Indicators' Chicago business barometer dropped to 60.8 in November from a one-year high of 66.2 in October. Economists expected a more modest decreased reading of 63.2.
From Europe, the U.K. economy registered robust growth as estimated in the third quarter with strength in consumer spending offsetting weakness in exports and business investment. U.K. gross domestic product grew 0.7 percent sequentially in the third quarter, unrevised from the previous estimate published on October 24, second estimates from the Office for National Statistics showed Wednesday. This follows a 0.9 percent expansion in the second quarter. Year-on-year, GDP increased 3 percent, in line with preliminary estimate.